Guinn taking no stand yet on business-fee hike

Wednesday, May 23, 2001 | 10:08 a.m.

CARSON CITY -- Although Gov. Kenny Guinn wants time to evaluate Sen. Mark James' plan to raise business franchise fee, he said he is lukewarm to the idea.

"I would hope it brings about good discussion, and I will wait and see those discussions," Guinn said Tuesday.

"We have a projected shortage of $1 billion in eight years," Guinn said. "I'm concerned that we don't start piecemealing it and do what we've done in the past ... taking a particular revenue stream and taxing a group over here and not solving our revenue problem."

The plan offered by James, R-Las Vegas, is aimed at raising enough money to give schoolteachers a 2 percent raise in each of the next two fiscal years. It would impose an annual fee -- $150 to $50,000 -- on as many as 172,000 businesses registered with the secretary of state.

The Las Vegas Chamber of Commerce is opposed to the plan. Chamber spokeswoman Kami Dempsey said it could mean small business is paying a higher rate than big companies that carry a lot of debt.

She gave the example of a company with three employees, which owns its building and equipment, that pays $8,000 to $10,000 a year. A major company with a big debt load would not pay the same percentage, she said.

Dempsey also said some Nevada firms would be hit harder than out-of-state companies.

A plan that James first proposed called for a $500 additional fee for every firm registered with the secretary of state, but Nevada firms would be eligible for up to a $500 rebate on their business activity tax.

Guinn, reminded that he said he was opposed to any new tax, noted that James' proposal began as a tax on out-of-state corporations.

"What I said was, no new taxes to the people of the state of Nevada," Guinn said.

In addressing the state's tax structure, the governor said he had to cut his proposed budget by $120 million. "We're not getting enough dollars to service our growth and roll-up costs."